Its been a long time coming but finally one can use PayPal in Kenya to withdraw funds based on an update I was just alerted to via a popular technology mailing list in Kenya. Its a well-known fact that Kenyans in the Diaspora are key drivers behind the Kenyan economy through the large amounts of money in remittances they send every month into the country.

This is clearly a move by Equity Bank, which is one of the largest banks in Kenya to tap into the popularity of electronic remittances from Kenyan Diaspora via the hugely popular PayPal service. According to statistics from the Central Bank of Kenya, approximately US$ 100 Million is remitted every month as of May 2013 so its a massive opportunity for Equity Bank and PayPal.

Its a little disappointing that that the PayPal service in Kenya can only be used for withdrawals instead of also sending money but it is a start in the right direction. In addition, it seems that the service is being offered in conjunction with South Africa’s First National Bank (FNB) based on a prominent link on the Equity Bank web site. Another aspect about the PayPal withdrawal service from Equity Bank is that one has to open a bank account to use it which I think could be a big deterrent for many would be users. Ideally, the service could be operated by Equity Bank but available to all whether or not they have a bank account there. Indeed, a step further would be to make it bank impartial so that one could use it via PesaPoint ATMs or Safaricom’s MPESA as well – which I am willing to bet are in the pipeline.

You can find out more information on the PayPal withdrawal service via Equity Bank’s web site here.

The Author

Moses Kemibaro

Moses Kemibaro is the Founder of Dotsavvy, Kenya’s first Digital Business Agency which he established in 2002. He also currently serves as the Commercial Manager in East Africa for the Perform Group, the leading global digital sports media business that owns Goal.com, the world’s leading digital destination for football content with over 70 million users per month globally - and 2 million in Kenya.

Moses is a seasoned digital services professional having worked in Africa’s Internet Industry for over 15 years. In 2012 he was the Sales Director for Africa at InMobi, the world’s leading Independent mobile ad network where he led sales in Kenya, Egypt, Nigeria and Ghana. Between 2010 and 2012, Moses was the Founding Regional Manager at Dealfish East Africa (now known as OLX Kenya) which he grew from scratch to become the leading online classifieds on mobile and desktop in Kenya and Uganda.

Previously, Moses worked at companies such as 3mice Interactive Media and Africa Online at the very start of Kenya’s digital revolution. Moses is also an award-winning and often quoted TechBlogger at MosesKemibaro.com where he rants and raves about all things digital in Kenya and Africa.

This is indeed good. Just to point out that an mkesho account is actually a full equity bank account, so its not too difficult for one to access their money easily via mpesa. Another thing is you can also link you prepaid visa and mastercard to you paypal account, which is how we have been making payments for domain registration, elance and other online services. So paypal has pretty much covered the payments for services side but has indeed not captured money transfers.

“Its a little disappointing that that the PayPal service in Kenya can only be used for withdrawals instead of also sending money but it is a start in the right direction.” – It’s the other way round Moses 🙂

If they play their cards right, this could turn out to be another way to strengthen the ‘club’ effect that Equity loves to nurture. Either way its only a matter of time before PayPal decide that Kenya is ‘ready’ for direct withdrawal to bank.

Hi Moses, thanks for the articles, indeed the partnership is a good opportunity for Kenyans.

A point of correction however. It is also possible to send money via pay pal. Sending money was always possible even in the past, the only thing Kenyans couldn’t do was to withdrawal money from their local bank account. So the partnership between Equity Bank and Pay Pal now makes this possible.

This is not a solution that will last.. or that will be cost effective to run an online business.. for example.. if you have $100 on paypal.. you’ll be charged 4% fee to send money to fist national bank in SA.. the bank will then takes it fees reducing amount further.. then the bank will send money to a central equity account.. then equity will disburse funds to respective accounts that initiated withdraw.. during this process equity will take fees based on interbank transfers from SA to Ke.. then they will mark it up with their margin.. then they will use their own exchange rate that you’ll have no influence to negotiate.. this means your $100 withdraw (though the rest of the process as explained above is hidden to customer) you might end up with only $60 or $75 at its best.. the only lasting solution is parliament to enact legislation that allow paypal to operate freely in the country.. anyways “nice college try’ for equity.

@mike thanks for the feedback and great to hear from you after such a long-term. I too was wondering about the FNB link and how this may affect the total payout. For sure there will be issues if what you have suggested will indeed happen. However, as far as I know, Equity Bank will only charge 1.5% commission on transactions?

using Equity indeed does take quite some time. and as always anytime you need to use the bank and foreign currency is involved, your money will end up being chopped and chopped and you end up getting a much lower amount.

you are better off using some of the simplified services offered by people out there, (the genuine ones) as you will get more than the bank.

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